Question: Consider two mutually exclusive projects, Project V and Project W. Both require an initial investment of $24,000. Year Project V Project W 1 $10,000 $9,000

Consider two mutually exclusive projects, Project V and Project W. Both require an initial investment of $24,000.

Year

Project V

Project W

1

$10,000

$9,000

2

$8,000

$7,000

3

$6,000

$5,000

Requirements:

  • Calculate the NPV for each project using a discount rate of 15%.
  • Determine the payback period for each project.
  • Calculate the IRR for each project.
  • Which project should be accepted based on NPV?

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